Tax Alert: 30 April 2013

Presidential Resolution No.ПП-1914 approved the Regulation “On the order of sale and purchase of foreign currency by individuals and on exchange offices” (Regulation).

In accordance with the Regulation, as of 1 February 2013:

sale of foreign currency to individuals – residents of Uzbekistan, is carried out by authorised banks via non-cash international plastic cards;

sale of foreign currency to individuals – non-residents is carried out in the amount not exceeding the amount of previously converted foreign currency (to be confirmed by the certificate of the prescribed form);

purchase of foreign currency from individuals (both residents and non-residents) is carried out by authorised bank without limitations.

New forms of tax reports

Resolution of the Ministry of Finance and State Tax Committee, registered by the Ministry of Justice No.2439 of 22 March 2013, (Resolution 2439) approved the renewed forms of the tax reports.

Resolution 2439 also states that tax reports for 2012 are to be submitted in accordance with the order and the forms, which were effective in 2012.

Double tax treaty with Estonia

Presidential Resolution No.ПП-1932 of 7 March 2013 approved the Convention between the Republic of Uzbekistan and Republic of Estonia for the avoidance of double taxation and prevention of fiscal evasion with respect of taxes on income and capital, signed on 28 September in New York.

New Special Industrial Zone "Djizzak"

In accordance with Presidential Decree No.УП-4516 of 18 March 2013 (Decree) new Special Industrial Zone "Djizzak" is to be created in Djizzak region (SIZ "Djizzak") for a preliminary term of 30 years with potential prolongation. During that period special customs and tax regimes and benefits will be in force within its territory.

Decree provides exemption for legal entities registered with the SIZ "Djizzak" from corporate income tax, property tax, infrastructure development tax, unified tax payment (for small companies), contributions to the Road Fund, provided that the amount of their direct investments are:

from 300,000 USD to 3 million USD – exemption is valid for 3 years;

from 3 million USD to 10 million USD – exemption is valid for 5 years;

over 10 million USD – exemption is valid for 7 years.

Legal entities registered with the SIZ "Djizzak" would also benefit from a relief from customs payments (except for customs clearance fees) on imported equipment, raw materials and spare parts that are not produced in Uzbekistan, imported to the territory of the SIZ "Djizzak" for implementation of projects, as per the lists approved by the Cabinet of Ministers.

Benefits for foreign investors

Presidential Decree No.УП-4515 of 15 March 2013 introduced amendment into the List of main guaranties, benefits and preferences for foreign investors and enterprises with foreign investments.

Specifically, property imported to Uzbekistan by enterprises with foreign investments (with the share of foreign investments not less than33% in the share capital) for their own production needs, is exempt from payment of customs duty for the period of two years starting from the state registration date. Previously, this exemption was provided for an indefinite term.

New regulations on preliminary/periodic customs declarations

Resolution of the State Custom Committee registered by the Ministry of Justice No.2418 of 30January 2013, (Resolution 2418)provides an opportunity to submit preliminary customs declaration, i.e. submit declaration prior to actual arrival of imported goods to Uzbekistan.

Another Resolution of the State Customs Committee, registered by the Ministry of Justice No.2418 of 30January 2013, (Resolution 2419) provides that periodic customs declarations can be filed in cases where similar goods are regularly imported by the same person, i.e. if the same type of goods are imported more than one time within 60 (sixty) calendar days from the same consignor to the same consignee under the same contract/terms.

Both Resolution 2418 and Resolution 2419 provide that preliminary/periodic customs declarations cannot be applied in respect of goods:

prohibited for importation to Uzbekistan;

subject to licensing;

that require obtaining a permit from authorities (except for certificate of conformity, sanitary, veterinary certificates etc.).

Resolution of the Cabinet of Ministers of 4 March 2013

Resolution of the Cabinet of Ministers No.63 of 4 March 2013 approved and introduced as of 1 April 2013 the lists of documents and other information that should be filed to customs authorities by carriers for each type of transportation (i.e. air, railway, car and water transport).

List of technological equipment was updated

New edition of the list of technological equipment exempt from import customs duty and value added tax, was approved by Resolution of the Ministry of Economy, Ministry of Finance, Ministry of Foreign Economic Relations and Trade and State Tax Committee, registered by the Ministry of Justice No.2436 of 20 March 2013.

New edition of the list was mainly provided to reflect recent changes to the classification of goods, which is based on the harmonised international classification of goods amended in 2012. At your request we can provide the full text of the new list.

Rules of temporary import (export) of goods and transport

Resolution of the Cabinet of Ministers No.106of 13 April 2013 (Resolution 106) approved Rules of placement of goods and vehicles under the ‘Temporary import (export)’ customs regime and Rules of temporary import and export of goods and vehicles without registration of customs declaration.

Resolution 106 also provides the list of goods, which are not subject to temporary import (export).